Interaxon: Developing the Toronto region into the Silicon Valley of Neurotech

You may have heard about a revolutionary brain-sensing headband called MUSE. It is the world’s first clinical-grade consumer EEG device. Used with a smartphone or tablet, Muse acts as a powerful mindfulness and meditation tool, by measuring a user’s levels of attention, relaxation and mind wandering, and giving real-time feedback, challenges and progress tracking to help them improve their brain health.

MUSE is the brainchild of Interaxon, one of several rapidly evolving home-grown neurotech startups in the Toronto region working to create devices that alter the way we think, feel and behave. Interaxon is at the leading edge of a revolution in neurotech, which has made the development and commercialization of low cost, portable personal neurotech devices like MUSE possible.

“It’s an exciting time to be involved in this space,” says Dr. Graeme Moffat, Director of Scientific & Regulatory Affairs, Interaxon. “Mobile health is accelerating like never before as people take greater ownership of their own brain health, whether related to mental health or healthy aging.”

An aging global population means huge growth in healthcare over the next few decades, which represents tremendous opportunity for neurotech. “We’re only just scratching the surface,” says Moffat, “but the potential here is massive… to make our company into a major player in brain health.”

Beyond commercial applications, MUSE is being used for research and clinical applications at over 100 health and science centres such as the Mayo Clinic and Harvard University. In fact, Interaxon’s highest organic growth has been in healthcare from clinical psychologists, psychiatrists and counsellors, who are using MUSE in their practice and for patients to use at home. The company is currently working with partners to develop apps for MUSE to address conditions like ADHD – a huge potential market opportunity, given that one in 9 children in North America are affected by this condition.

The company also applies the brain data MUSE collects to improve user experience, and in the process has built one of the largest commercial brain research databases in the world.

Startups like Interaxon and the Toronto region’s emerging neurotech and digital health cluster face huge opportunities and significant challenges. From where Moffat sits, Interaxon’s ability to grow and thrive in Toronto’s technology space is directly related to the Toronto region’s potential to become a global hub for neurotechnology research and development.

He believes the Toronto region is well positioned to seize a tremendous opportunity to dominate this space. “…the potential is high to develop a really important globally competitive cluster of companies in the Toronto region… one that sustains an ecosystem and helps to drive our economy in the 21st century.”

Around the world, cancer biology and pharmaceutical research are established industries with lots of activity, clustered in particular locations. In neurotech, especially digital therapeutics for behavioural and brain health, there’s no dominant global capital yet. “Even Silicon Valley hasn’t really figured out digital therapeutics yet,” he notes. Toronto is competing for pre-eminence in this space alongside San Diego, the San Francisco Bay area, Boston, New York, Tel Aviv and London.

All of the right ingredients are here in Ontario for the Toronto region to become the global neurotech cluster, with world-class innovation talent and research. “Between the University of Toronto, Toronto’s hospital network, McMaster, Ryerson, York… the quality of the neuroscience research and brain research in Toronto is right at the global top.” Yet, Moffat laments that it’s not a bragging point for Toronto and a nagging question persists: “Why doesn’t Toronto’s biotech industry look like Boston or San Francisco?”

Moffat’s view is that the Toronto region lacks the critical density of biotech and neurotech companies these other places have. The challenge is to ensure that universities, small startups like Interaxon, larger companies, government and other stakeholders can work together to pave the way for this cluster.

He suggests there are three main things cities in Canada, like Toronto, need to change to be globally successful in the neurotech space. First on the list is a coherent, national innovation strategy that brings together all three levels of government to focus on investing in these clusters. Moffat acknowledges that there are some fantastic initiatives happening in Toronto, such as Baycrest’s Canadian Centre for Aging and Brain Health Innovation and the Ontario Brain Institute (OBI). But he suggests government investments need to be more focused on the locations of highest potential, such as Toronto, Waterloo and Ottawa, if we are going to move forward quickly enough to compete globally.

Second, a new system that breaks down administrative barriers and silos is essential for progress. This includes creating much stronger federal intellectual property legislation that favours Canadian entrepreneurs and companies and doesn’t disadvantage them compared to American companies. It also involves better utilizing Ontario’s healthcare system – one of the largest centrally administered single-payer systems in the world – for commercialization purposes. “There’s recognition that we should be able to roll things out and test them at scale very easily,” says Moffat, “but it isn’t happening at the pace it should.”

Finally, Moffat believes breaking down silos is also key to creating a more open environment of shared innovation in the Toronto region. “In other places, whether it’s the biotech clusters in Switzerland, London or Boston, people move much more freely between industry and academia. Lots of professors have startups, for example.”

A virtuous circle of innovation is beginning to take shape here and the cluster is building. The Toronto region’s small size means that there are lots of spontaneous opportunities to interact with other players in the space and hubs like MaRS Discovery District have been invaluable for health tech startups. “At MaRS events, I run into people from companies, hospitals and universities and we have the conversations that lead to innovation. We start projects together. That is the advantage of a cluster.”

Moffat has high hopes that Interaxon will become just one of several large neurotechnology companies in a Toronto-centred cluster that interacts closely with universities and hospitals around Canada and in the broader world. “Nothing would please us more than, in a few years, to have other big local neurotech companies trying to hire people away from Interaxon, because that would mean that the whole sector was healthy and we were doing something right.”